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What Is a Business? Business is a sort of company that is set up to support a particular customer. The primary objective of a business is making money, however, there are many other objectives that can be accomplished by the company. In the end, however, the ultimate aim of a business is to satisfy a customer's needs and wants. According to Peter Drucker argues, this is the most accurate way to define business. If there are no customers in the business, the business cannot survive. Internal functions are those activities carried out within the organization Internal functions involve the actions performed within an organization to accomplish a defined set of goals. They could include policies and procedures. In order to be successful, these processes and policies need to be meticulously designed, implemented and communicated across the organization. The top management in the company has to send a clear signal that the responsibility for controlling errors and risks is crucial issue, and that internal control must be given the highest priority. Also, all employees must be aware of their role in internal monitoring and should be able to convey important information to the upper levels. Sales and marketing include examples of internal functions. Sales managers are responsible to ensure that their merchandise as well as services are delivered to consumers at the right time. They also have to ensure that they reach all areas they are specifically targeted. In addition to these core routines, internal operations include tasks that help internal and external business functions to function smoothly. Managers of these functions supply an overview of the business to management so they can make informed decisions. Internal controls can prevent mistakes help safeguard information and protect against fraud. Without internal controls, financial reporting is uncertain and operational efficiency could be decreased. In addition, they can harm the image of the business. It is therefore crucial to establish internal controls in order to assure the integrity of company's financial statements and to prevent theft and fraud. Profit is the measurement of an organization's success Profit is defined in both relative and absolute terms. Absolutely, profit is the amount earned over a defined time. In relative terms, profit is the quantity of profit as a percentage of revenue. Profit is an important indicator for companies, since it can be used as a motivation to make investments and take risk. The goal of profitability is the first priority for any company. Without it, any business is doomed to fail. Profitability is determined by two factors that are income and expenses. Income is the amount earned from the sale of a service. It is not inclusive of the cost of acquiring capital. The expenses are the cost of managing the business. Profit refers to the financial gain the business earns after deducting expenses. The greater the profit margin more profitable the business's financial health. Another key indicator is the degree of satisfaction with the customer. A high level of customer satisfaction can help a firm improve its products and services. Email newsletters, polls and customer surveys are the most common ways of gathering data. Profit does not define success. It means different things to different companies. For instance, a large-scale shop is likely to be successful when they break even, and/or when it has a profit of PS2,000 per week. Breaking even is an achievement for a company in its first year, but it is not necessarily an indicator of success. Business is a risky activity There are four phases in the cycle of business. Each phase is different in it's duration and influences the economy, such as the rate of employment, inflation, and the consumption of consumers. These cycles are watched by central banks, and are among the main factors that influence their monetary policies , as well as their short-term interest rates. These cycles are marked by a contraction, peak and trough. Understanding the different phases of the business trade cycle can help investors better understand the current market conditions. The first phase of the business cycle is known as the expansion phase. The next phase is the contraction phase. The contraction phase is when the economy reaches its maximum growth rate but it does not keep growing. This causes unemployment rates to climb, while incomes drop. Also, the economy enters a bear market, as investors sell their holdings. The phase of contraction can be caused by a sudden rise in interest rates or by a financial emergency or the escalating inflation. Small-sized companies contrast with. medium-sized companies There are many ways to categorize businesses. One is based on number of employees. A small business is generally defined as having fewer that 50 employees. A mid-sized enterprise has between 50 to around $1 billion in revenue. Larger businesses typically exceed 1.25 billion in revenue. While large corporations can dominate certain industries, most of the work and production is executed by smaller and mid-sized companies. The difference between mid-sized and small businesses is crucial as each business type employs different numbers of people. While small companies generally employ less than a hundred people, mid-sized organizations could employ thousands of people. Small and mid-sized enterprises may also benefit from different organizational processes and software. Additionally, to these distinct differences and the size of a business could impact the type of workplace it provides. Smaller companies may have more flexibility, say in the process of streamlining communication and decision-making processes. A smaller company may have the ability to take action faster than larger corporations. A small-sized company may offer flexible working hours or work from home work options and other bonuses. One advantage of working with small-sized businesses is that they are more imaginative and focused in their sales strategy. Additionally, small businesses are more likely to try and test solutions to ensure they're successful. Also, they make decisions quickly and with less complexity that large companies. Smaller companies, too, will frequently refer other small businesses to their solution if they are satisfied with it. Subchapter S corporations Subchapter S corporations are closely linked to the other types of corporations. In essence, the procedures used to form for a company are the same but the primary distinction is the type of ownership. A majority of individuals are allowed to hold stock in S businesses. There are also some rules governing who can be an investor. If you are considering to establish a company, it is best to consult a professional. Legal and tax professionals are able to provide expert advice. You can also sign up to the CorpNet Partner Program, a consortium of companies who provide business establishment and compliance services. By referring clients, you are able to earn extra income. If you are an S corporate entity, you'll cut down on tax. Subchapter S corporations aren't taxed at the corporate level. This means that the profits you generate are not taxed twice. In addition, S corporations don't have to pay any payroll tax or Social Security or Medicare taxes. This means they're far more tax efficient than other types of business organizations. But, it has some disadvantages, including the fact that shareholders have to pay taxes on all amounts that are distributed to them. In addition, it creates an obligation for the company distribute cash more often in order to affect the development of capital. This means it might not be the right choice for businesses that need the funds for a large investment.

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